[Click eStock] "F&F, Excessive Stock Price Decline Compared to Growth Potential"

Shinhan Investment Corp. maintained its 'Buy' rating and target price of 180,000 KRW on F&F on the 4th, viewing the excessive stock price decline relative to growth potential as a buying opportunity at the bottom.

Hyunjin Park, a researcher at Shinhan Investment Corp., said, "The stock price decline was excessive compared to growth potential, and the company is in the process of creating new growth drivers," adding, "It is reasonable to consider the current stock price as the bottom."

F&F's third-quarter earnings are expected to slightly exceed market consensus. Shinhan Investment Corp. estimated F&F's third-quarter consolidated sales at 549.4 billion KRW and operating profit at 173.1 billion KRW, representing increases of 24% and 25% year-over-year, respectively. Researcher Park explained, "Strong earnings slightly above the current consensus are expected. Domestic sales are likely to remain sluggish in the third quarter following the second quarter, but sales of the MLB brand, which has a high proportion of Chinese sales, are expected to have grown, especially with Chinese subsidiary sales projected to have increased by 37% year-over-year."

As of the end of August, the number of MLB stores in China, including pop-up stores, reached 1,007 (985 regular stores), increasing by more than 60 stores compared to the second quarter, showing stronger store openings than in the first half of the year. Researcher Park said, "At this pace, the initial target of 1,100 stores for the year is expected to be exceeded."

During the third quarter, new Chinese brand openings for Duvetica and Supra began in earnest, with sales recognition expected from the fourth quarter. The second-half store plans in China for Duvetica and Supra are 23 stores (by February next year) and 25 stores (200 stores next year), respectively, with about 50 new store openings pending. Researcher Park forecasted, "Sales from these two brands in China are expected to be around 6 to 9 billion KRW this year, with significant sales contributions expected next year."

This content was produced with the assistance of AI translation services.